CHASHMA SUGAR MILLS LIMITED
Annual Reports 2003
CONTENTS
COMPANY INFORMATION
VISION AND MISSION STATEMENT
STATEMENT OF ETHICS AND BUSINESS PRACTICES
STATEMENT OF COMPLIANCE
REVIEW REPORT TO THE MEMBERS
PATTERN OF SHAREHOLDING
TEN YEARS GROWTH AT A GLANCE
TEN YEARS REVIEW
NOTICE OF MEETING
DIRECTORS' REPORT
AUDITORS' REPORT TO THE MEMBERS
BALANCE SHEET
PROFIT AND LOSS ACCOUNT
CASH FLOW STATEMENT
STATEMENT OF CHANGES IN EQUITY
NOTES TO THE ACCOUNTS
COMPANY INFORMATION
BOARD OF DIRECTORS		Khan Aziz Sarfaraz Khan                Chairman/Chief Executive
		Begum Zari Sarfaraz
		Begum Laila Sarfaraz
		Ms. Zarmine Sarfaraz
		Mr. Iskander M. Khan
		Begum Mehmooda Salim Khan
		Mr. Abdul Qadar Khattak
BOARD AUDIT COMMITTEE		Begum Zari Sarfaraz
		Begum Mehmooda Salim Khan
		Mr. Iskander M. Khan
COMPANY SECRETARY/		Mujahid Bashir
CHIEF FINANCIAL OFFICER
AUDITORS		Messers Hameed Chaudhri & Co.
		Chartered Accountants
COST AUDITORS		Messers Munawar Associates
		Chartered Accountants
TAX CONSULTANT		Messers Hameed Chaudhri & Co.
		Chartered Accountants
LEGAL ADVISOR		Messers Khokhar Law Chambers
		Advocates & Corporate Counsel
BANKERS		National Bank of Pakistan
		Habib Bank Limited
		Muslim Commercial Bank Limited
		The Bank of Khyber
		Bank Al-Falah Limited
		Bank Al-Habib Limited
		Standard Chartered Bank Limited
REGISTERED OFFICE		Banglow No 16, PSM Colony,
		Nowshera Road, Mardan
HEAD OFFICE		20-A, Markaz F-7, Islamabad
		Phone: 2650805-7
		Fax:      2651285-6
FACTORY		Dera Ismail Khan
		Phone: 750090, 750091
		Fax:      750092
VISION STATEMENT
Efficient organization with professional competence of top order is engaged to remain a Market leader in
the sugar industry in manufacturing and marketing of white sugar.
To ensure attractive returns to business associates and shareholders as per their expectations.
MISSION STATEMENT
Quality objectives are designed with a view to enhance customer satisfaction and operational efficiencies.
To be a good corporate citizen to fulfill the social responsibilities.
Commitment to building Safe, Healthy and Environment friendly atmosphere.
We, with our professional and dedicated team, ensure continual improvement in quality and productivity
through effective implementation of Quality Management System. Be a responsible employer and reward
employees according to their ability and performance.
We value the social and economic well being of our partners and strive for a harmonious environment
conductive to team performance.
The quality policy also encompasses our long term Strategic Goals and Core Values, which are integral
part of our business.
STRATEGIC GOALS
Providing Customer Satisfaction by serving with superior quality production of white sugar at
lowest cost.
Ensuring Security and Accountability by creating an environment of security and accountability
for employees, production facilities and products.
Expanding Customer Base by exploring new national and international markets and undertaking
product research and development in sugar industry.
Ensuring Efficient Resource Management by managing human, financial, technical and infra-
structural resources so as to support all over strategic goals and to ensure highest possible value
addition to stakeholders.
CORE VALUES
Striving for continuous improvement and innovation with commitment and responsibility;
Treating stakeholders with respect, courtesy and competence;
Practising highest personal and professional integrity;
Maintaining teamwork, trust and support with open and candid communication;
Ensuring cost consciousness in all decisions and operations.
STATEMENT OF ETHICS AND BUSINESS PRACTICES
The articulation of this statement is based on the following points :-
Elimination of improper payments or use of the Company's assets.
Elimination of political contributions.
Elimination of reporting violations.
Accuracy of books and records of the Company and its safe custody.
Authentic and genuine payment of amounts due to customers, agents or suppliers.
Respect of employees, suppliers, agents, customers and shareholders.
Integrity and scrupulous dealings.
Health and safety environments.
Conflicts of interests.
Strict observance of the laws of the country.
Respect of basic human rights.
Teamwork, trust, determination and delegation of powers.
Our dealings with all stakeholders, especially with the government and financial
institutions, are based on honesty and equality. Our accounting & finance policies are
guided by prevailing corporate regulations, Companies Ordinance, 1984, and the Code of
Corporate Governance. Further, we aim to fully comply with International Accounting
Standards (IAS) • in the preparation of financial statements whereas any departure
therefrom is adequately disclosed.
Chashma Sugar Mills Limited is committed to ensure that this Statement of Ethics & Business
Practices is understood and implemented by all concerned individuals in letter and spirit.
STATEMENT OF COMPLIANCE WITH THE CODE OF
CORPORATE GOVERNANCE
The statement is being presented to comply with the Code of Corporate Governence contained in
Listing Regulation No. 37 of the Karachi Stock Exchange and Chapter XIII of the listing
regulations of the Lahore Stock Exchange for the purpose of establishing a framework of good
governance, whereby a listed Company is managed in compliance with the best practices of
corporate governance.
The Company has applied the principles contained in the Code in the following manner;
1.     The directors have confirmed that none of them is serving as a director in more than ten
listed Companies including this Company.
2.     All the directors of the Company are registered as taxpayers and none of them has defaulted
in payment of any loan to a banking company, a DFI or an NBFI or, being a member of a
stock exchange, has been declared as defaulter by that stock exchange.
3.     No casual vacancies were occurred ir the Board during the year.
4.     The Company has prepared a "Statement of Ethics and Business Practices", which has
been signed by all the directors and employees of the Company.
5.     The Board has developed a vision/mission statement, overall corporate strategy and
significant policies of the Company. A complete record of particulars of significant policies
along with the dates on which they were approved of amended has been maintained.
6.     All the powers of the Board have been duly exercised and decisions on material transactions
have been taken by the Board.
7.     The meetings of the Board were presided over by the Chairman when he was present, and
the Board met at least once in every quarter. Written notices of the Board meetings along
with agenda, were circulated at least seven days before the meetings. The minutes of the
meetings were appropriately recorded and circulated.
8.     There were no new appointments of CFO / Company Secretary during the year.
9.     The Directors' Report for this year has been prepared in compliance with the requirements
of the Code and it fully describes the salient matters required to be disclosed.
10.   The financial statements of the Company were duly endorsed by the CEO and the,CFO
before approval by the Board.
11.   The directors, CEO and executives do not hold any interest in the shares of the Company
other than that disclosed in the pattern of shareholding.
12.   The Company has complied with all the corporate and financial reporting requirements of
the Code.
13.   The Board has formed and Audit Committee, which comprises of three members.
14.   The meetings of the Audit Committee were held at least once every quarter prior to approval
of interim and final results of the Company and as required by the Code. The terms of
reference of the Committee have been formulated and advised to the Committee for
compliance.
15.   The Board has set-up an effective internal audit function.
16.   The statutory auditors of the Company have confirmed that they have been given a
satisfactory rating under the quality control review programme of the Institute of Chartered
Accountants of Pakistan (ICAP), that they or any of the partners of the firm, their spouses
and minor children do not hold shares of the Company and that the firm and all its partners
are in compliance with International Federation of Accountants (IFAC) guidelines on code of
ethics as adopted by ICAP.
17.   The statutoiy auditors or the persons associated with them have not been appointed to
provide other services except in accordance with the Listing Regulations and the auditors
have confirmed that they have observed IFAC guidelines in this regard.
18.   We confirm that all other material principal" contained in the Code have been compiled
with.
For and on behalf of the Board
Mardan                                                                                             KHAN AZIZ SARFARAZ KHAN
December 8, 2003                                                                              CHIEF EXECUTIVE
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF
COMPLIANCE WITH BEST PRACTICES OF THE CODE OF
CORPORATE GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of
Corporate Governance prepared by the Board of Directors of Chashma Sugar Mills Limited to
comply with the Listing Regulation No. 37 of the Karachi Stock Exchange (Guarantee) Limited,
Chapter XIII of Listing Regulations of Lahore Stock Exchange (Guarantee) Limited and chapter
XI of listing regulations of the Islamabad Stock Exchange where the Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of
Directors of the Company. Our responsibility is to review, to the extent where such compliance
can be objectively verified, whether the Statement of Compliance reflects the status of the
Company's compliance with the provisions of the Code of Corporate Governance and report if it
does not. A review is limited primarily to inquiries of the Company's personnel and review of
various documents prepared by the Company to comply with the Code.
As part of our audit of the financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective
audit approach. We have not carried out any special review of the internal control system to
enable us to express an opinion as to whether the Board's statement on internal control covers
all controls and the effectiveness of such internal controls.
Based on our review, nothing has come to our attention which causes us to believe that the
Statement of Compliance does not appropriately reflect the Company's compliance, in all
material respects, with the best practices contained in the Code of Corporate Governance as
applicable to the Company for the year ended 30 September, 2003.
LAHORE;                                                                                 HAMEED CHAUDHRI & CO.,
December 09, 2003                                                                       CHARTERED ACCOUNTANTS.
PATTERN OF HOLDING OF THE SHARES HELD BY THE SHAREHOLDERS
AS AT 30 SEPTEMBER. 2003
						Total
Shareholders	Shareholding					Shares Held
167	From	1	to	100	Shares	16,675
1,082	From	101	to	500	Shares	498,637
178	From	501	to	1,000	Shares	173,522
262	From	1,001	to	5,000	Shares	712,966
68	From	5,001	to	10,000	Shares	513,000
19	From	10,001	to	15,000	Shares	241,900
13	From	15,001	to	20,000	Shares	240,700
14	From	20,001	to	25,000	Shares	318,000
8	From	25,001	to	30,000	Shares	221,800